Can Wage Transparency Alleviate Gender Sorting in the Labor Market?

Abstract

A large share of the gender wage gap can be attributed to occupation and employer choices. If workers are not well informed about these pay differences, increasing wage transparency might alleviate the gender gap. We test this hypothesis by examining the impact of mandatory wage postings. In 2011, Austria introduced a policy that requires firms to provide a minimum wage offer in job postings. To compare the pay prospects of vacancies before and after the introduction, we predict posted wages using detailed occupation-firm cells, which explain about 75 percent of the variation in wage postings. While we estimate a substantial gender gap of 15 log points, mandatory wage postings do not affect gender sorting into better-paying occupations and firms.